Answer:
B. False
The business should not make this entry on 31 December.
Explanation:
The accounting principle of prudence states that profits should not be overstated and losses should not be understated. This means that any profit should not be recorded until it is realized while any losses should be recorded as soon as they are anticipated. As the business has not received cash from tenants on 31 December 2016, it should not make any entry debiting cash and crediting the rent receivable.
The business should let the rent receivable balance intact until the rent is received on 15 January and till then record no entry to such as the above.
When management policy is to write off completely the production volume variance to cost of goods sold and the organization is experiencing increasing inventory.
The impacts of various denominator levels under absorption, costingincome in fixed overhead allocation rates.
We provide a pedagogical method for teaching students how "denominator level choice" affects absorption costing income in a typical costing system with predefined overhead application rates.
Alternately, using larger denominator levels while inventory is falling mitigates the decline in absorption costing income since fixed overhead is released into cost of goods sold.
Therefore, We also prove mathematically that the denominator level choice has no impact on absorption costing income if the production volume variance is prorated based on the units causing the variance.
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Answer:
$149,000
Explanation:
Data provided as per the question below
Cost of goods sold = $982,000
Inventory = $186,000
Purchase = $945,000
The computation of amount of ending inventory is shown below:-
Cost of goods sold = Inventory + Purchase - Ending inventory
= $982,000 = $186,000 + $945,000 - Ending inventory
= $982,000 = $1,131,000 - Ending inventory
= $149,000
Answer:
The question is not complete:
Here is the complete question:
The projected benefit obligation was $460 million at the beginning of the year. Service cost for the year was $25 million. At the end of the year, pension benefits paid by the trustee were $21 million and there were no pension-related other comprehensive income accounts requiring amortization. The actuaries discount rate was 5%. The actual return on plan assets was $24 million although it was expected to be only $23 million.
What was the pension expense for the year?
Here is the answer: The pension expense is $25 million.
Explanation:
Pension is the form of defined benefit contribution plan which require employers to make certain periodic contribution on behalf of employees. This contribution is reported as an expense in the income statement if even though the benefit has not been enjoyed by the employees. To determine the value of this expenses to be included in the income statement, the components of the pension expenses are relevant.
Components of pension expense are service cost, interest cost, return on plan asset, amortization of prior service costs and gain or loss from change in asset value.
Here is the determination of the pension expense as required by the question.
$`M
Service cost 25
Interest ($460,000,000*5%) 23
Expected return on plan asset (23)
Amortization of prior service costs -
Gain or loss in change in value -
Pension expense 25
Answer:
Signature Appliance Group
The environmental force that caused the company to change its product features is:
the Social and Cultural Environment.
Explanation:
The Social and Cultural Environment refers to the changing needs of customers in South America as a result of the values, attitudes, and preferred styles of consumers. These are always in a state of flux every year. Since customers preferred to grill outside rather than inside their kitchens, adding the grill unit in the ovens that the company sells in South America will not enable customers to choose its ovens over competitors'. To respond to the stated needs of its customers, the grill must be removed, thereby reducing the cost of the ovens.
The change made by Signature Appliance Group in removing the grill unit from their ovens sold in South America was influenced by the consumer environment force. This change was made in response to consumer preferences for outdoor grilling, thus altering the physical aspects of their product.
In the context of the scenario provided, it was the consumer environment force that influenced Signature Appliance Group to remove the grill unit from its ovens sold in South America. Consumer environment force pertains to changes in consumer preferences, habits, or buying behaviors. The company observed that its customers in South America preferred outdoor grilling and as a result, they opted not to use the grilling feature of the oven. Hence, the company decided to alter the physical aspects of its product by removing the grill from the ovens. Such alteration represents a response to consumer demands, thereby aiming to improve customer satisfaction and product relevance. Expounding on physical aspects, these are tangible characteristics or features of a product that cater to consumer needs and preferences, as shown in the example of nonstick surface, unbreakable bottle, and other such elements.
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Calculation of amount of direct materials charged to job no. 173:
It is given that the work in process inventory on December 31 consisted of job no. 173 with a balance of $66,200.
Job no. 173 has been charged with manufacturing overhead costs of $20,000. Denver allocates manufacturing overhead costs at a rate of 50% of direct labor cost. It means the direct labor cost would be 20,000/50% = $40,000
Now we can calculate the amount of direct materials charged to job no. 173 as follows:
Direct material Cost = Total Cost allocated to Job – Direct Labor Cost – Manufacturing Overhead Cost
= 66200-40000-20000
= 6200
Hence, the amount of direct materials charged to job no. 173 is $6,200
The Denver company's job costing system showed that job no. 173 in the work in process inventory had a balance of $66,200. Direct labor was calculated by dividing manufacturing overhead of $20,000 by 50% to arrive at $40,000. The direct materials cost, which is obtained by subtracting direct labor and manufacturing overhead from the total job cost, amounted to $6,200.
The Denver company's problem involves understanding their job costing system, particularly regarding job no. 173. They have a working process inventory at a balance of $66,200. The manufacturing overhead costs, which are 50% of the direct labor costs, have been charged at $20,000 for this job. To find the direct materials costs, we first need to calculate direct labor cost. Given that manufacturing overhead is 50% of direct labor, it means that direct labor costs would be $20,000 divided by 50% or $40,000. The total job cost is composed of direct labor, direct materials, and manufacturing overhead. So, to determine the direct materials charged to this job, we subtract the known costs (direct labor and manufacturing overhead) from the total job cost; $66,200 (total cost) - $40,000 (direct labor) - $20,000 (manufacturing overhead) equals $6,200. Therefore, the amount of direct materials charged to job no. 173 is $6,200.
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